2 min read

[BAB] Lesson 4: How to think about your role in a peer-to-peer environment

When you build typical web2 apps, you own everything you build. Your users don't talk to each other. They talk to you. This is true even if you build a social network--if you shut down your app, you take everyone's connections with you. It's centralized by definition.

Decentralized experiences are peer-to-peer. Your users use your dApp to interact with each other directly--they don't come through you. This means that when you deploy your smart contracts, they're no longer a part of your app. Other developers can create their own UI on top of your contracts. They could even create bots that interact with your contracts on their behalf. It's like creating an API and a database that you don't own.

This is open source taken to its logical limit. Your app's business logic is not a competitive advantage. It's freely available to anyone and everyone. There's no point in patenting it. It's not your intellectual property. It belongs to the community.

You might be wondering: how do I build a business around that? Your specific answer is going to vary depending on what you want to build, but generally it boils down to two things:

Your brand

This is your competitive advantage. You can't expect to make a profit off of 100% of the people who use your app, but as soon as you launch, you're everyone's favorite. You did it first--everyone else is just a copycat. You've probably heard the phrase "imitation is the sincerest form of flattery." If you want to remain the top brand, learn from your competition, be humble, and be generous.

The community

With any business, having a loyal customer base is everything. If people are excited to use your app and tell their friends, you're going to do well. If they feel like a part owner of the brand, you're going to do very well. Tokens on a blockchain are an ideal way to incentivize community involvement. You can reward your users for participating and they'll be that much more likely to stay with you.

Your long term success as a developer and business in web3 is determined by the same factors as everything else in life: honesty, transparency, humility, kindness, etc. Put your community above yourself.


P.S. There are ways to write your smart contracts so you don't hand over ownership to the community, but I generally don't recommend that. More on this tomorrow.